[starwind]

Variable rate loans are awesome from an economic perspective. When the economy is good, your income and investment portfolio and property value should increase along with the rate increase. But if the economy goes south and the Fed drops interest rates, the interest rate drops along with it. You’re squeezed but your bills just got smaller.

2022 is basically the only time since 1985 where interest rates have gone up while the economy has gotten weaker—and that’s by design to reduce inflation. (And you’d have a hard time seeing the economy slow down just by looking at the labor market.)

Unless you can lock in a really low fixed interest rate, you should seriously consider variable rate loans for cars, houses, student loan refis, etc.